GOP will retain control of the House

While it is almost certain that GOP will retain control of the House after the midterm election, the question remains whether Republicans will take control of the Senate. It is now widely expected that Republicans are expected to win the Senate tonight, or eventually given the expected runoffs in Georgia and Louisiana.

On the economic calendar in the US today, the government reported the trade deficit jumped 7.6% in September to $43 billion as exports weakened. Consensus forecasts were calling for a shortfall of $40.6 billion.

Later this morning, September factory orders dropped 0.6% as expected, on top of a 10% plunge in August.

European markets finished broadly lower Tuesday, with shares in France off the most, after the European Commission revised down its growth forecasts and predicted more of the low inflation and high unemployment that is currently plaguing the region. The eurozone's economy is now expected to expand 0.8% this year, 1.1% next year and by 1.7% in 2016.

Meanwhile, Japan's Nikkei index hit a seven year high as investors had their first chance to react to the surprise stimulus announced by the Bank of Japan on Friday. Markets in Japan were shut yesterday for a public holiday. The index, which jumped over 4% in the morning session to cross the 17,000 barrier for the first time in seven years, ended up 2.7%.

In corporate activity, Michael Kors (NYSE:KORS) fell more than 8% even as fiscal second quarter results easily topped estimates, and it raised its outlook for the year. There are concerns the brand risks overexposure, with fears of discounting hitting the stock this summer.